HST and GST/PST in British Columbia

March 30, 2013
by Jared Cross, C.P.A, C.G.A
As you have probably heard on April 1, 2013 BC will remove the Harmonized Sales Tax (HST) and return to a Goods and Services Tax (GST) and Provincial Sales Tax (PST) system.
 

PST is a retail sales tax payable on goods or services acquired for personal use or business use, unless otherwise exempt.   

PST will apply to the following:  

  • The purchase or lease of new and used goods in B.C.
  • Goods brought, sent or delivered into B.C. for use in B.C.
  • The purchase of:
    • Software
    • Services to goods such as vehicle maintenance, furniture assembly, computer repair
    • Accommodation
    • Legal services  
  • Telecommunication services, including internet services and digital and electronic media   

Exemptions from PST include:  

  • Food for human consumption (e.g. basic groceries and restaurant meals)
  • Books, newspapers and magazines
  • Children’s clothing
  • Bicycles  

Non-Taxable Sales and Services include:  

  • Sales of real property such as residential housing or commercial real estate
  • Admissions and memberships
  • Professional services (other than legal services)
  • Transportation fares (e.g. bus, train, ferry, airline)  

Do you need to register for PST?  

 

Some questions to ask:
  1. Where you registered for PST before the change in 2010?
  2. Do you sell goods not listed in the exempt items above?
  3. Do you invoice for materials along with your services?
  4. Do you provide legal services?
  5. Do you provide internet servies such as web hosting?
 
If you said YES to any of these questions you should be registering for a PST number.
 
However there are some exceptions, if you meet all  of the following criteria you do not need to register:
  •  You are located in B.C. but do not maintain established commercial or business premises (e.g. you sell goods from your home). 
  • You sell eligible goods (all goods other than liquor, vehicles, boats or aircraft) or software, or provide taxable services. 
  • You do not, in the ordinary course of your business, sell vehicles, boats or aircraft. 
  • You do not sell liquor, other than under a special occasion licence. 
  • You have $10,000 or less in gross revenue from all retail sales of eligible goods, software and taxable services for the previous 12 months, and your estimated gross revenue from all retail sales of eligible goods, software and taxable services for the next 12 months is $10,000 or less.            
  • You are not a lessor. 
  • You are not an independent sales contractor. 
  • You are not a provider of four or more units of accommodation in hotels, resorts, boarding houses or similar establishments.
  • You are not a contractor who acquires goods for the purpose of fulfilling contracts to improve real property.
 
If you meet all of the above critera you are considered a “Small Seller” and are not required to register for PST.
     
For more information about the introduction of PST or to register for a PST number please contact us or go to the PST website. You can also call them directly at 1-877-388-4440.
 
Also see the Frequently Asked Questions and Specific situations  for the PST and it’s implementation.